Water pollution and economic growth: threshold effects of water availability in subnational India

This study analyses whether water availability acts as a regime-switching variable in the income–water quality relationship in India for a set of water quality indicators such as Biological Oxygen Demand (BOD), Total Dissolved Solids (TDS), and Faecal Coliform (FC). The analysis is conducted at the sub-national district level using geospatial data for the period 2001–2017, addressing the limited availability of consistent administrative and ground-level water quality data. The results show that the relationship between income and water quality under conditions of water availability is heterogeneous across water quality indicators. The EKC is more consistently observed in high-water regions, although for BOD it is evident in both low- and high-water regions. In the case of TDS, low-water regions exhibit a monotonic increase in pollution with income, while high-water regions show an inverted U-shaped relationship, with initial deterioration followed by improvements. For FC, low-water regions exhibit a monotonic improvement in water quality with rising income, whereas high-water regions follow an EKC pattern. The results highlight the importance of water availability in enhancing assimilative capacity and facilitating income-induced improvements in water quality. However, such improvements occur only at high levels of income and are limited to a small number of districts.